A Deep Dive into the iShares MSCI World ETF’s Standout Year

MSCI World ETF US4642863926

The iShares MSCI World ETF (URTH) concluded 2025 with a performance that solidifies its position as a core holding for exposure to developed equity markets. The fund delivered a total return exceeding 22% and saw its assets under management swell to more than $6.8 billion. This impressive result was primarily driven by the outsized influence of U.S. technology stocks within its benchmark index.

URTH provides investors with a passive investment strategy, tracking the MSCI World Index. This offers diversified access to large and mid-cap companies across 23 developed nations. A defining characteristic of the portfolio is its substantial allocation to U.S. mega-cap firms, particularly within the technology and communication services sectors.

When measured against its "Global Large-Stock Blend" peer category, URTH demonstrated consistent outperformance throughout 2025 and across multiple time horizons. The fund's returns, as of the end of 2025, were as follows:

• 1 Month: 3.35% (Category: 0.37%)
• 3 Months: 7.25% (Category: 4.66%)
• 2025 Full Year: 22.07% (Category: 18.60%)
• 1 Year (through Nov. 30, 2025): 17.46% (Category: 14.58%)
• 3 Years (annualized): 19.03% (Category: 15.25%)
• 5 Years (annualized): 13.07% (Category: 10.32%)

The ETF closely mirrors its benchmark, exhibiting a minimal tracking error against the MSCI World (Net) Index. Its liquidity is robust, highlighted by an average daily volume surpassing 463,000 shares and a 30-day median bid-ask spread of just 0.03%.

Valuation ratios for the fund include a price-to-earnings ratio of 26.14 and a price-to-book ratio of 3.89, reflecting the premium valuations associated with high-quality stocks in developed markets. It offers a 12-month trailing dividend yield of 1.27%, with distributions made on a semi-annual basis.

Portfolio Composition: Concentration and Breadth

Following a market-capitalization-weighted methodology, URTH's holdings are concentrated in its largest constituents. The top ten positions alone account for 27.3% of the fund's assets. This group is led by prominent U.S. technology giants:

1. NVIDIA (5.45% weighting; 1-year return: 36.57%)
2. Apple (4.85%; 11.56%)
3. Microsoft (4.11%; 13.80%)
4. Amazon (2.67%; 2.85%)
5. Alphabet Class A (2.19%; 66.81%)
6. Broadcom (1.87%; 50.89%)
7. Alphabet Class C (1.85%; 65.84%)
8. Meta Platforms (1.72%; 8.89%)
9. Tesla (1.53%; 15.50%)
10. JPMorgan Chase (1.07%; 37.93%)

The strong performance of these holdings, especially those benefiting from the artificial intelligence investment cycle, was a major contributor to the fund's 2025 gains.

Sector and Geographic Exposure

At the sector level, technology is the dominant force, representing 27.92% of the portfolio. Other significant sector allocations are:

• Financials: 16.67%
• Industrials: 10.57%
• Health Care: 9.78%

While this tech-heavy tilt proved advantageous last year, it also increases the fund's sensitivity to that specific market segment.

Geographically, the ETF has a pronounced U.S. focus. The regional breakdown for the largest country weights is:

• United States: 70.06%
• Japan: 5.43%
• United Kingdom: 3.81%
• Canada: 3.44%
• Switzerland: 2.74%

Despite the concentration at the top, the fund maintains broad diversification with a total of 1,320 individual holdings.

Market Context and Investor Demand

Developed equity markets enjoyed a strong year in 2025, supported by resilient corporate earnings and sustained high levels of investment in artificial intelligence. The MSCI World Index benefited from robust technology sector performance, solid contributions from financial and health care stocks, and the leadership of the United States, which constitutes over 70% of the index.

Investor appetite for the strategy remained healthy. Over the past twelve months, URTH attracted approximately $1.43 billion in net new assets, including $552 million in the most recent quarter alone. This consistent inflow pattern suggests continued confidence from both institutional and private investors in developed markets, even at elevated valuations.

Competitive Landscape

Within the global equity ETF universe, URTH competes with several major funds. A comparison of key 2025 metrics illustrates its positioning:

ETF (Index)	Expense Ratio	AUM	Holdings	2025 Return	Morningstar Rating
URTH (MSCI World)	0.24%	$6.8B	1,320	22.07%	5 Stars
ACWI (MSCI ACWI)	0.32%	$25.4B	2,800+	22.41%	4 Stars
VT (FTSE Global All Cap)	0.06%	$60.3B	9,800+	22.43%	4 Stars
QWLD (MSCI World StrategicFactors)	0.30%	$177M	1,298	17.42%	4 Stars

URTH positions itself with a mid-range expense ratio. Unlike the ACWI or VT funds, it deliberately excludes emerging markets, focusing solely on developed economies. The QWLD ETF employs a factor-based strategy but has significantly lower assets, which can impact liquidity.

Outlook and Risk Considerations

The trajectory of the technology sector will be a central driver for URTH's near-term performance. Its allocation of nearly 28% to tech makes it sensitive to AI investment cycles and semiconductor demand. Other sectors offer balance: financials could benefit from a rising interest rate environment, while health care stocks provide more defensive characteristics during volatile periods.

The fund's benchmark, the MSCI World Index, undergoes a comprehensive review each quarter. The next major review is scheduled for announcement on February 10, 2026, with changes taking effect on March 2, 2026. These adjustments can lead to portfolio shifts as market capitalizations within the developed world evolve.

From a technical perspective, URTH traded near its 52-week high of $187.87 in early January 2026, with its net asset value at the same level. The fund exhibits slightly lower volatility than the broad U.S. equity market, with a 3-year standard deviation of 12.17% and a beta of 0.94. The average market capitalization of its holdings exceeds $255 billion, underscoring its mega-cap focus.

Conclusion: A Focused Play on Developed Economies

The iShares MSCI World ETF successfully combines the diversification of 1,320 holdings with a clear emphasis on large companies from developed economies, led by the United States. Its strong 2025 performance was rooted in technology holdings and the robustness of the U.S. equity market, attracting significant asset growth.

Earning a 5-star rating and a Bronze medal from Morningstar, the fund's risk-adjusted results are favorably highlighted against its competitors. URTH is particularly suited for investors seeking targeted exposure to developed markets while intentionally avoiding an allocation to emerging economies. Its high U.S. weighting creates a close correlation to American equity performance, with positions in Europe and Japan providing limited international diversification.